Question

Washington Air Company is considering the purchase of a helicopter for connecting services between the​ company's base airport and the new intercounty airport being built about 30 miles away. It is believed that the chopper will be needed only for six years

Washington Air Company is considering the purchase of a helicopter for connecting services between the company's base airport and the new intercounty airport being built about 30 miles away. It is believed that the chopper will be needed only for six years until the Rapid Transit Connection is phased in. The estimates on two types of helicopters under consideration, the Whirl 2B and the ROT 8, are given in the table below. Assuming that the Whirl 2B will be available in the future with identical costs, what is the annual cost advantage of selecting the ROT 82(Use an interest rate of 10%) EEB Click the icon to view the estimates on two types of helicopters under consideration Click the icon to view the interest factors for discrete compounding when i-10% per year The annual cost More Info First cost Annual maintenance Salvage value Useful life in years The Whirl 2B $108,000 $3,500 $12,000 3 The ROT 8 $130,000 $10,000 $23,000 6 Print Done

Answer 1